When the tourism minister starts talking about how we should change the country’s strategy from attracting “land” tourists to “air” tourists you know that the industry, which props up around one-third of our economy, is anything but buoyant.
Obviously, those who travel over land (as many coming from Jordan, Kuwait and Saudi Arabia do) will be put off by the prospect of driving by a Syrian rebellion on their way to a relaxing vacation on a Lebanese beach or mountain resort.
And because we don’t know how long the Syrian uprising will last, this year may just be the best time to stop resting on one’s laurels and chart a new course for investment in the industry, just like all those tourists who will be leaving their cars at home this year.
The alternative is to indirectly put over half a million jobs at risk as the sector also plays the role of a catalyst for construction and manufacturing and economic growth as a whole.
Last year, capital investment in the sector was estimated at $455 million, accounting for 12 percent of overall investments. According to ANIMA Investment Network, capital investment for travel and tourism is expected to reach $714.8 million, or 11.8 percent of estimated overall investments in 2016.
Golden days are gone
But gone are the days when Lebanon posted the highest growth rate in tourists arrivals in the world (39 percent in 2009). The current social, economic and political circumstances provide an entirely different reality.
This year tourism numbers have already fallen 18.6 percent. Hotel occupancy in Beirut fell by 20 percent in the first five months of the year, putting it near the top of the loser’s club among capital cities that have been rocked by revolutions, such as Cairo (-42 percent) and Manama (-44percent).
As bleak as all the above looks, the Lebanese investors, notorious for their resiliency and entrepreneurship, still move forward, spending millions this year in an industry that could come to a grinding halt.
From the perspective of the foreign investment experts, investing in Lebanon today would equal lunacy. However, as Lebanese, we think we know how the tides of change sweep across an economy and that those who hesitate and sit on the sidelines miss out on the profits reaped by the brave.
War, lack of government, assassinations, economic stagnation and fear have not been able to blow out the light of our determination to play by the rules that we create and only we understand.
This is the underlying truth of our culture and the promise every Lebanese citizen makes to the investor that chooses to launch a new touristic project in Lebanon.
Unfortunately, the speed at which investments must be made, and profits collected in this sector, have left us counting the change.
Business in this industry has an average lifespan of two to three years and the effect of rising inflation, not the underlying fundamentals that would have any investor heading for the hills, are what we have to fear most at this point. A government without an inflation policy, coupled with an economy controlled by oligopolies, means prices go up and quality goes down.
Hence an industry which used to be showered with praises for its memorable service in the past has now begun to lose its shine and is sending heavy spending visitors to other areas of the world where they receive more ‘bang’ for their buck.
At this point, as investors in this sector, the question is not what to invest in and when to do it that plagues our minds, but rather “why” and “how effectively”.
Attracting scores of visitors is great; getting them to spend happily is another story. It is time for business managers and investors alike in this sector to choose the right “why” and capitalize on the “how effectively”; otherwise we will again fall in the trap of being held back by alack of government policy. We have learned to live with that in the past, but this time it may just be the difference between the black and the red.
PAUL NAIMEH is founder of Enologia, Route 69 and El Rancho
